Market Insights: November Rally Continues

Stocks extended their November rally last week as investors cheered lower-than-forecast inflation data.

The Dow Jones Industrial Average gained 1.94%, while the Standard & Poor’s 500 added 2.24%. The Nasdaq Composite index rose 2.37% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, increased 3.36%.^1,2,3

Stocks March Higher

A better-than-anticipated consumer inflation number on Tuesday sent bond yields sharply lower, igniting a powerful, exceptionally broad-based rally that saw 91% of all New York Stock Exchange volume advancing in price and a similarly substantial advance (85%) on the NASDAQ. Small-cap stock performance was solid, surging 5.2%, more than double the advance of the S&P 500.⁴

Further gains came the following day as wholesale price inflation rose even slower than consumer prices. The rally paused in the final days of trading as stocks digested their gains and investors assessed weak retail sales and industrial production reports and a rise in continuing jobless claims.

Inflation Cools

Two inflation reports released last week, the Consumer Price Index (CPI) and the Producer Price Index (PPI), showed continued inflation progress. Consumer prices were flat in October from the previous month, while the 12-month increase was 3.2%. Both were below market forecasts. Core CPI (excluding food and energy) also moderated, rising just 0.2% in October and 4.0% from a year ago–below forecast. The climb in the annual core CPI was the lowest in two years.⁵

Producer prices confirmed the disinflationary picture, as wholesale prices declined 0.5% in October (versus a +0.1% forecast). It was the biggest decline in 3 ½ years. Over the last 12 months, wholesale prices rose just 1.3%.⁶

This Week: Key Economic Data

Tuesday: Existing Home Sales. FOMC Minutes.

Wednesday: Durable Goods Orders. Jobless Claims. Consumer Sentiment.

Friday: Purchasing Managers’ Index Composite Flash.

^{Source: Econoday, November 17, 2023
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Monday: Agilent Technologies, Inc. (A)

Tuesday: Nvidia Corporation (NVDA), Lowe’s Companies, Inc. (LOW), Analog Devices, Inc. (ADI)

Wednesday: Deere & Company (DE)

^{Source: Zacks, November 17, 2023
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

"Don't be afraid of perfection. You will never attain it."

– Salvador Dalí

Starting a New Hobby? These Tips Can Help You Understand the Tax Situation

Whether picking up painting or cooking new concoctions in your kitchen, starting a new hobby is always fun and a great way to learn something new. Did you know there are some tax considerations when starting a new hobby? Especially if you are considering turning your newfound passion into a business.

Taxpayers are expected to report any income earned from hobbies, even if it's not a licensed business. To compare, businesses are done to make a profit, while hobbies are done for recreation, not to make a profit. Here are nine factors that can help you determine whether a hobby could also be considered a business, according to the IRS:

• Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
• Whether you have personal motives in carrying on the activity.
  Whether the time and effort you put into the activity indicate you intend to make it profitable.
• Whether you depend on income from the activity for your livelihood.
• Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
• Whether you or your financial professional have the knowledge needed to carry on the activity as a successful business.
• Whether you successfully made a profit in similar activities in the past.
• Whether the activity makes a profit in some years and how much profit it makes.
• Whether you can expect to make a future profit from the appreciation of the assets used in the activity.

You may also be able to deduct some of the expenses associated with your hobby. Within certain limits, taxpayers can usually deduct ordinary and necessary hobby expenses. An ordinary expense is one that is common and accepted for the activity. A necessary expense is one that is appropriate for the activity.

*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁷

3 Yoga Poses for Beginners

The first pose is downward-facing dog. This pose is used in most yoga practices. In it, you have your arms stacked under your shoulders and your bottom in the air with your back legs straight. Your body is in the shape of an upside down 'V."

The next is Crescent Lunge. Stand in a forward lunge with one foot in front and bent. Your back leg is straight. Now, straighten your arms and lift them over your head. This pose is often used in yoga flow classes.

Last, we have Triangle pose. Step your feet apart (wider than your shoulders). Then, hinge at your hip and lean over your front leg. If you can, reach down with the same arm that's in front and rest it on the floor or on a yoga block.

Tip adapted from SELF Magazine⁸

A man tells you there are 12 seconds in a year. This sounds absurd, but in what sense is he correct?

Last week’s riddle: It is found in the ground, round as a circle and yards deeper than a cup, and a hundred horses cannot pull it up. It isn’t going anywhere; it cannot think; it might provide you with something to drink. What is it? Answer: A well.

A coastal road in the desert in Fuerteventura, Canary Islands, Spain.

Footnotes and Sources

^{1. The Wall Street Journal, November 17, 2023.}

^{2. The Wall Street Journal, November 17, 2023.}

^{3. The Wall Street Journal, November 17, 2023.}

^{4. CNBC, November 14, 2023.}

^{5. CNBC, November 14, 2023.}

^{6. CNBC, November 14, 2023.}

^{7. IRS.gov, July 3, 2023.}

^{8. Self.com, July 19, 2023.}

^{Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.}

^{The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.}

^{The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.}

^{The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.}

^{U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.}

^{International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.}

^{Please consult your financial professional for additional information.}

^{This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.}

^{Copyright 2023 FMG Suite.}

^{Advisory services are offered through Q2 Wealth Management (“Q2”), a Registered Investment Adviser. Insurance products and services are offered through Q2 Wealth Insurance, an affiliated insurance company. Q2 Wealth Management and Q2 Wealth Insurance are not affiliated with or endorsed by the Social Security Administration or any other government agency. ⦁ Information presented herein is intended for a broad audience, as educational in nature, and does not intend to make an offer or solicitation for the purchase or sale of securities, products, or services. This content may be dated. It is not intended to provide any tax or legal advice or provide the basis for any financial decision(s). Be sure to consult your investment adviser, tax professional, or legal counsel concerning your specific situation before considering any information discussed herein. ⦁ Investing always involves risk and possible loss of capital. Past performance is not indicative of future results. ⦁ Q2 has a reasonable belief that this marketing does not include any false or materially misleading statements or omissions of facts regarding Q2’s services, investments, or client experiences. Q2 has a reasonable belief that the content as a whole will not cause an untrue or misleading implication regarding Q2’s services, investments, or client experiences. ⦁ This communication shall in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents other than those States in which Q2 is registered or where otherwise legally permitted. ⦁ The securities industry personnel in question may only transact business in those states where they are registered or otherwise excluded or exempted from state registration requirements. ⦁ All expressions of opinion are subject to change without notice. All information is subject to change without notice. Any views or opinions expressed may not reflect those of Q2. ⦁ The Adviser believes that the content provided by third parties and/or linked content is reasonably reliable and does not contain untrue statements of material fact, or misleading information. This content may be dated. ⦁ “Likes” are not intended to be endorsements of our firm, our advisers, or our services. Please be aware that while we monitor comments and “likes”, we do not endorse or necessarily share the same opinions expressed by site users. We request that you do not post or comment. ⦁ Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client's evaluation. ⦁ Charts, graphs, and formulas may be discussed and displayed which are not intended to be used by themselves to determine which securities to buy or sell, or when to buy or sell them. Such charts and graphs offer limited information and should not be used on their own to make investment decisions.}